Sinclair, Inc.

Greetings. Welcome to the Sinclair fourth quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Chris King, Vice President of Investor Relations. You may begin.

Thank you. Good afternoon, everyone, and thank you for joining Sinclair's fourth quarter 2024 earnings conference call. Joining me on the call today are Chris Ripley, our president and chief executive officer, Lucy Rudishauser, our executive vice president and chief financial officer, and Rob Weisbord, our COO and president of local media. Before we begin, I want to remind everyone that slides for today's earnings call are available on our website, sbgi.net. on the events and presentation page of the investor relations portion of the site. A webcast replay will remain available on our website until our next quarterly earnings release. I would also like to note our prior release of certain fourth quarter local media financial information which we disclosed in late January prior to the launch of our refinancing. Certain matters discussed on this call may include forward looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company's most recent reports as filed with the SEC and included in our fourth quarter earnings release. The company undertakes no obligation to update these forward-looking statements. Included on the call will be a discussion of non-GAAP financial measures, specifically adjusted EBITDA. These measures are not formulated in accordance with GAAP, are not meant to replace GAAP measurements, and may differ from other companies' uses or formulations. Further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website. Let me now turn the call over to Chris Ripley.

Good afternoon, everyone, and thank you for joining us. I wanted to start with a bit of breaking news regarding NextGen Broadcast. Earlier today, the National Association of Broadcasters filed a petition with the FCC, which asked the Commission for a roadmap to sunset ATSC 1.0 in order to facilitate a full transition to ATSC 3.0, which would include transitioning the top 55 DMAs to 3.0 within three years, which covers 70% of the country. It also asks for the remaining markets to be converted to 3.0 within five years. As an industry, we believe that such an orderly transition will benefit the nation's consumers by offering significant improvements in picture quality, audio clarity, interactive features, and public safety capabilities. It would also support the long-term viability and global competitiveness of the broadcast industry by making significantly more spectrum available for additional content and data casting. We look forward to working with the NAB, the industry, Chairman Carr's STC, and the Trump administration as the industry continues to make significant progress on next-gen broadcast and as we move towards a more equal competitive playing field for broadcasters. Turning to slide three, I wanted to highlight what was an active and successful year for Sinclair in 2024. Once again, we reported that what we believe will be the strongest core advertising performance amongst our broadcasting peers in 2024. In addition, we announced record breaking political advertising revenues of 405 million, doubling the 2026 presidential year results. We also completed a successful year of distribution and network affiliation agreements with over 5% net retransmission growth year over year in 2024. Our fourth quarter results were an illustration of this progress. as our adjusted EBITDA of $330 million in the quarter came in $5 million above the high end of our guidance range as announced last November. In addition, as discussed last quarter, we launched several top-rated sports-related podcasts just prior to the football season, and they continue to perform extremely well with several new local and national podcasts being launched in the coming weeks. We also launched our Tennis Channel D2C product, which now offers our premium linear channel content on a streaming platform for the first time ever. On the venture side of the business, we received $209 million in cash in 2024 as we continue to reposition our minority investment portfolio towards more majority-owned assets. Lastly, this month, we substantially completed a comprehensive refinancing of our balance sheets which Lucy will provide an update on a bit later. Turning to slide four, I wanted to take a quick moment to reflect on our equity performance over the past two years. As you can see in the graph, our share price has outperformed our four publicly traded broadcast peers in both 2024 as well as for the two-year period beginning in 2023. For this sector that has had numerous misperceptions and market overreactions, we're proud of our relative outperformance over the past two years. We also note recent public statements and M&A activity from companies such as Disney, Skydance, and Comcast that are focused on the broadcast business as a key corporate asset going forward. On slide five, we highlight certain of our key consolidated financial metrics for the year in comparison to our most recent guidance provided on our November earnings call. Distribution revenue came in above our guidance range, as well as our net retrans revenue grew significantly in the fourth quarter year-over-year, reflective of multiple distribution and network affiliation agreement renewals, as well as subscriber trends that significantly, or sorry, that slightly exceeded our forecasts. Core revenues came in slightly below our expectations on late year macroeconomic related pressures in several categories. However, media expenses were favorable to our forecast, driven largely by compensation and sales-related costs. As a result, we exceeded our adjusted EBITDA guidance range for the quarter. Lastly, our capital expenditures were also favorable to our forecast, with roughly half of the variance due to timing and half permanent savings. Turning to slide six, our ventures portfolio continues to transform away from our minority investment holdings as we look to position the portfolio in more majority-owned assets over time. Total cash inflows during 2024 totaled $209 million, including $47 million in the fourth quarter. Ventures had $406 million of cash at year end, and after our comprehensive refinancing of SVG, we are now able to carefully examine the potential uses for the cash balance at Ventures. We continue to examine outside investments for ventures that we would be able to consolidate our results, as well as potential for returning a portion of the cash to shareholders over time, be that a share buyback authorization or other shareholder-friendly actions. Lucy will provide more detailed breakdown of the business unit financials in a bit, but first... I wanted to provide an update on the Pay TV Great Rebundling, which we've talked about in recent quarters, before I turn it over to Rob for a broadcast update. On slide seven, we turn to the Charter Pay TV Bundle example once again. The streaming services now included in Charter's Select Plus Pay TV package have seen another $3 in incremental value as several of the streaming platforms have increased their retail pricing once again. Charter subscribers now enjoy more than $81 per month worth of streaming services, which equates to a 59% discount versus YouTube TV and a 66% discount in net effective rate for pay TV over the past 12 months when taking into account those streaming services. Notably, even though Charter is just now launching an aggressive marketing campaign to highlight this revaluing, The company is already seeing positive impacts in its business, as Spectrum reported its lowest net subscriber loss figure in almost three years. We continue to highlight the tremendous value available in the Pay TV Bundle. With that said, let me now turn it over to Rob to continue the discussion about our broadcast business.